Head teachers say staff redundancies brought about by the shortage of money this year could mean class sizes reverting to 1950s levels of 40 or more.

Delegates stressed the seriousness of the issue to Stephen Twigg (left)

They have likened the row between central and local government over the "missing millions" to a playground spat.

At the National Association of Head Teachers (NAHT) annual conference they said the "unprecedented funding crisis" meant they might soon pull out of the hard-won agreement on reducing teachers' workloads.

The Schools Minister, Stephen Twigg, told the conference in York that local education authorities (LEAs) had a one-week deadline to explain why they had not allocated £533m nationally to schools.

He stressed that ministers did not want to see a repeat of the crisis.

Into the red

Short-term options included allowing schools to set deficit budgets.

Here we go again: everyone blaming everyone else

Head teacher Paul Woodward

This is something they can do in agreement with their local education authority, which has to underwrite the shortfall.

But the provision is rarely used. The NAHT's leadership has now asked the government to licence every school to go into the red if necessary, with or without local agreement.

The government says it is not encouraging schools to go down that route. It says it has provided more than enough for this year and the priority is to get LEAs to pass it on.

The councils argue that the money not yet allocated is being kept back to pay for things that will need doing during the year, such as the induction of new teachers.

Head teacher Paul Woodward from St Whites School in Cinderford, Gloucestershire, said: "Here we go again: everyone blaming everyone else, just like in the school playground."

Mr Twigg also said the government wanted to see a three-year settlement for teachers' pay next year, arguing this would make it easier for heads to plan their budgets.

But he was left under no illusion about the strength of feeling among the delegates and the urgency of the issue.

Anger

There was loud applause for East Riding of Yorkshire secondary school head Lesley Hughes, who said her budget was £230,000 less than expected - and many other schools locally were in a similar position.

To balance it would require cuts in teaching and support staff, training and curriculum resources.

"Its effects will be deeply damaging," she said. "To struggle along to the next budget season is simply not an option."

Another delegate, Simon Springett, said: "Resources to go forward are not there. Resources to stand still are not there. The dangers of going backwards are immense."

Mike Stewart, head of Westlands Bilateral Secondary School in Torquay, said the pupil-teacher ratio in his school was reverting to its 1971 level.

"If I make the cut I'm required to make it will revert to the 1951 level. Is that acceptable in education today?"

The shadow education secretary, Damian Green, said later he was not surprised head teachers were angry.

They had been badly let down by a government which clearly did not have the money to fund its reforms.

'Black hole'

The NAHT believes there is a gap of at least £250m nationally between what schools need, to meet increased costs this year of 10%, and what they are being given.

And it says that, looking ahead, the government's estimated £3bn extra by 2005-06 for workplace reforms is actually more like £500m - leaving a "black hole" in the funding.

After lengthy negotiations, the government, local authority employers and a majority of the main staff unions signed a deal on teachers' workload earlier this year.

Its key provisions relate to the employment of more classroom assistants so teachers can get time away from children to prepare lessons properly.

The biggest teachers' union, the National Union of Teachers, did not sign because it was not convinced assistants would not be used as a less expensive substitute for fully qualified teachers.

Now, the NAHT has voted to demand that the government honour its commitments to fund the changes, "as failure to do so will render it impossible to implement the provisions of the agreement."

It says only 22% of schools have what they need for this year - and 17% have been given cash cuts - whereas all head teachers had been expecting increases.

The government says there should be £250m for schools over and above their higher costs this year.

The general secretary, David Hart, said: "I think there's a real risk that the NAHT will withdraw at some stage during the summer term."

Sources at the education department played down the significance of this, saying the workplace reforms were contractual and would go ahead anyway. The union would simply lose its say in the ongoing negotiations on the practical details.